Walt Disney Co. agrees to sell Miramax Films for $660M; deal ends six-month bidding processBy AP
Friday, July 30, 2010
Disney sells Miramax to investor for $660 million
NEW YORK — The Walt Disney Co. is selling Miramax Films to a group of investors for $660 million, marking a new phase for a studio that helped launch the career of Quentin Tarantino and push independent movies into the mainstream.
The deal announced Friday ends speculation that founders Bob and Harvey Weinstein — who lent the names of their parents, Miriam and Max, to the company — could regain control of the studio they launched more than three decades ago.
With ownership of the studio passes the rights to a long catalog of Oscar winners, including “Shakespeare in Love” (1998), “Chicago” (2002) and “No Country for Old Men” (2007).
It also comes with challenges, most notably a decline in DVD sales that has put into question the value of Hollywood movie libraries.
Disney had been looking to sell Miramax since January amid a studio overhaul, deciding that the label no longer resonated with its other family centric brands, such as Pixar and Marvel.
“Although we are very proud of Miramax’s many accomplishments, our current strategy for Walt Disney Studios is to focus on the development of great motion pictures under the Disney, Pixar and Marvel brands,” Disney President and CEO Robert Iger said in a statement. “We are delighted that we have found a home for the Miramax brand and Miramax’s very highly regarded motion picture library.”
The entertainment company signed an agreement late Thursday with Filmyard Holding, an investor group led by construction magnate and Hollywood outsider Ronald Tutor. Also pitching in on the deal is Colony Capital LLC, a real estate investment group, and its CEO Tom Barrack. Tutor and his partners put down a nonrefundable deposit of $40 million with Disney on Thursday. Disney said the deal could close as soon as Sept. 10.
What happens to the studio now remains unclear. Its new owners, Tutor and Barrack, did not respond Friday to requests for interviews. But Tutor said in a statement, “I am delighted and honored to acquire the Miramax library. He added, “We look forward to sharing this high quality content with the world in every form of media for many years to come.”
The Weinsteins launched Miramax in 1979 and steered it to more than 200 Academy Award best picture, acting and other nominations for its movies.
Tarantino won the 1994 best original screenplay award for “Pulp Fiction,” one of the low-budget Miramax hits of the 1990s that helped demonstrate that independent films could reach a wider audience.
The Weinsteins sold Miramax to Disney in 1993 for $80 million and stayed on with the company as managers.
But the duo left in 2005 to found The Weinstein Co. after years of prickly relations with Disney executives and a public spat over Michael Moore’s 2004 documentary “Fahrenheit 9/11,” which Disney refused to distribute.
With its film profits shriveling, Disney has all but shuttered Miramax. Shortly after longtime Disney studio chief Dick Cook stepped down last year, the company said that it would cut the number of annual Miramax releases to three, down from the usual six to eight. It also laid off 50 people in New York and Los Angeles, leaving the studio with just 20 employees.
In January, Miramax President Daniel Battsek left the company and the studio’s operations were folded into the rest of Disney’s film unit.
The Weinsteins tried to win Miramax back with financing from supermarket magnate Ron Burkle and Fortress Investment Group, but the bid fell short.
For Disney, the sale furthers a strategy of focusing on movies from which it can draw multiple streams of revenue, analysts said.
Disney can license “Toy Story” characters for action figures and video games, but “Miramax just doesn’t make that type of film,” said Tony Wible, an analyst for Janney Montgomery Scott.
Analysts also noted that the Miramax sale came the same week Disney bought online social-gaming company Playdom for $563.2 million, reflecting the broader shift of people’s time and attention to the Web.
“They’re dropping old economy assets for new economy assets,” said Needham & Co. analyst Laura Martin.
Shares of Disney, which is based in Burbank, Calif., rose 6 cents to $33.77 in afternoon trading Friday.
AP Business Writer Ashley Heher in Chicago contributed to this report.
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